The Pound got its groove back yesterday and advanced on the Euro as UK employment figures surpassed expectations and the Bank of England’s inflation report implied that the UK economic recovery was gathering momentum faster than expected.
Additional Euro losses were also triggered by less-than-impressive industrial production data for the Eurozone.
Overnight the common currency remained under pressure as investors focused on today’s growth reports and the Pound was able to consolidate gains ahead of the release of UK retail sales figures.
Already this morning data have shown that French economic growth expanded at a slower-than-forecast pace in the third quarter of the year. The Eurozone’s second largest economy grew by just 0.2 per cent in the third quarter year-on-year and contracted by 0.1 per cent, quarter-on-quarter, instead of stagnating as expected.
German GDP, on the other hand, showed expansion of 0.3 per cent QoQ as forecast by economists.
The Euro is currently trading against the Pound in the region of 0.8393
These results indicate that the Eurozone, which only emerged from a historically long recession this year, still has a long way to go before its recovery can be described as stable.
Overnight the Organisation for Economic Cooperation and Development also released a report which stated that France is falling behind the southern European nations which have had to implement harsh austerity in order to remain competitive.
According to OECD chief Angel Gurria; ‘To reduce the economic lag and lost time, France needs to keep up structural reforms’.
If today’s retail sales data for the UK show that sales increased by 3.1 per cent in October, year-on-year, the EUR/GBP pairing could soften further as trade continues.
However, as Italian GDP showed unexpected growth of 0.1 per cent QoQ, a surprise result with Eurozone GDP could help the Euro recover before the close of the European session.
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3469 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8393 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4432 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6230 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4101 >